American ExpressAmerican ExpressAmerican ExpressAmerican ExpressAmerican Express
United StatesChange Country

Using Your Business Credit Card as a Cash Flow Management Tool

By Frances Coppola

For many small and midsize enterprise (SME) owners, managing cash flow is a top priority. Tools that can help smooth out cash flow irregularities and keep the cost of financing working capital low can be very welcome. One tool that is not always recognized for its cash flow management properties is a business credit or charge card.

Broadly, as explained by small business advice website, there are three ways in which a business credit or charge card can help SMEs manage their cash flow:1


  • Businesses can draw on the credit line at any time, and in a number of ways, to help them spread expenses and reduce financing costs;
  • Online tools can help businesses keep track of outgoing payments;
  • Rewards programs and cash back can be used to meet certain business expenses.

Spreading Expenses and Managing Cash Flow With a Business Credit Card


Many SMEs experience cash flow gaps, when business expenses fall due but customer payments have not yet been received. Businesses can use a business credit card or charge card with an interest-free period to make payments in advance of receiving funds. Provided the balance is paid off by the end of the interest-free period, this can enable businesses to stay on good terms with suppliers even when they’re caught short of cash, without incurring interest charges on the working capital they’ve borrowed in the interim. SMEs that frequently experience cash flow management gaps might wish to opt for cards with long interest-free periods. Some card providers are developing innovative ways of enabling businesses to pay with their card even when the supplier does not accept cards.


A business credit or charge card can also be useful for spreading out large business expenses while keeping finance costs low. For example, a business might use a charge card with a long interest-free period to pay for next season’s inventory. At the end of the interest-free period, the business could pay off part of the balance from cash flow, then either convert the rest to revolving credit (if the card allows it) or refinance with a business loan. Using a credit or charge card this way for a large purchase can work out cheaper than up-front financing with a business loan.


For new businesses and those with poor credit scores, using a business credit card regularly and always paying on time helps to build the business’ credit score. SME advice website points out that this can make it easier to get other forms of business credit, such as loans, and may reduce financing costs over the longer-term since higher credit scores can earn a business lower interest rates.2


Simplifying Expense Management with Online Business Credit Card Tools


Many business credit cards have online tools that enable SME owners and managers to view details of their card payments and balance at any time. This can help business managers to decide on the best time to make card payments so as to maximize use of interest-free credit and better manage cash flow, freeing up cash for other purposes.


Some card providers will provide multiple cards on the same account. These can be particularly useful for managing employee expense claims. Cards on the same account can be issued to employees, enabling them to pay their expenses from the company’s account rather than meeting expenses themselves and reclaiming payment later. This can make business trips and entertaining clients easier for employees to manage, and it can also give senior management better control of expenses since online tools can give management an instant overview of expense payments made by all employees. explains that credit limits on employee cards can be used to create an authorization hierarchy for expenditure, helping to ensure that large expenses are always authorized by the most senior staff and thus reducing risk to the business.3


Using Rewards Programs to Help with Business Expenses


Businesses can use business credit card rewards points to pay for a range of ad-hoc business expenses such as flights, hotel bills, and entertaining. Some reward programs also offer discounts on things like legal expenses and fraud prevention.4 In addition, some cards offer extra bonus points or cash back for certain types of purchases, such as office supplies, telecommunications services, and travel.5


Employees can also build up reward points on their corporate credit cards. SMEs can choose whether to keep business costs down by using employee points for their own business expenses, or whether to try improving employee motivation by allowing them to use the points for personal expenditures.6



Business credit cards can enable businesses to make essential purchases as, and when, they need, while still closely managing cash flow. Choosing the right credit card mix can help SME managers keep business costs low and enable them to benefit from a range of discounts, offers and perks.

Frances Coppola

The Author

Frances Coppola

With 17 years’ experience in the financial industry, Frances is a highly regarded writer and speaker on banking, finance and economics. She writes regularly for the Financial Times, Forbes and a range of financial industry publications. Her writing has featured in The Economist, the New York Times and the Wall Street Journal. She is a frequent commentator on TV, radio and online news media including the BBC and RT TV.


1. “Business credit cards: how to use them for steady cash flow,”;
2. “Top 25 Business Credit Card Tips from the Pros,”;
3. Ibid.
4. Ibid.
5. “How to use Credit Cards for Small Business,” Daily Worth;
6. “Top 25 Business Credit Card Tips from the Pros,”;